1.2. Strategic Context
First and foremost, developing electronic government appeals to government administrations, companies and the public alike because it is generally understood to mean better and cheaper service. But electronic government is also an economic opportunity. The more obvious reason why this is so is the increasing importance of information technology (IT) in all aspects of business and social life. For cities this means that support of IT industries is crucial for increasing and maintaining wealth and employment in the local region, which is paramount for Bremen.
The less obvious but even more important reason for Bremen to engage in e-government is the reduction in the city's net income due to a decline in the once dominating harbor and steel industries, subsequent unemployment, and redistributions within Germany's complicated system of tax-income sharing between the different levels of government. The immediate challenge for Bremen is to reduce a structural deficit of DM 850 million in its annual budget. It needs to save up to 166 million per year in its operational budget in order to present a balanced budget by 2005. In that year, the Federal government will stop helping Bremen fill the gap in its yearly budget. In this context, electronic government may be a solution which allows Bremen to sustain a sufficient level of service while reducing operating costs.